Currency War Erupts, Threatening to Ripple Across Global Markets

The Wall Street Journal noted that Mr Trump's comments had an immediate impact on global markets, sending the stocks lower.

It points out the potential consequences trade escalations could have on American soybean exports, underscoring that China is the world's largest soy importer.

Benchmark 10-year US notes last fell 12/32 in price to yield 2.8894 percent, from 2.847 percent late on Thursday.

President Trump said he may be considering placing an additional $500 billion worth of tariffs on China.

President Donald Trump is continued his threats to impose tariffs on all Chinese imports to the US.

On Thursday, the European Union said it was developing plans to hit back at the United States if it attempted to place import tariffs on cars, something Trump has repeatedly threatened to do.

Last month, the Fed raised its benchmark rate for a second time this year and projected two more increases in 2018.

Then the bean really amps it up, saying: "Trump wants to win over more voters by starting a trade war". Rather, he may be prepared to wait as long as he feels it necessary to force other countries to adopt trade rules more favorable to the United States.

The U.S. currency extended losses in afternoon trading after CNBC reported that Trump was anxious the Federal Reserve will raise interest rates twice more this year.

In a break with the usual practice by United States presidents, Trump has been unusually vocal about the dollar, publicly criticizing its strength several times, though analysts question whether his frequent rhetoric will have a lasting impact.

But the yuan declined further Friday as the People's Bank of China (PBOC), which sets the yuan's daily trading band, weakened the rate by the widest amount in two years.

And while the currency has been weakening in recent weeks, Mr Nordvig said Thursday's sharp adjustment appeared to be a deliberate move.

But investors and traders attribute some of the gains to the Trump administration's tax cuts which are widening the fiscal deficit, leading to more government borrowing, and the imposition of import tariffs against China, Europe, Mexico and Canada which may contribute to inflation.

"That attracts dollars to the United States and increases the absorption of capital within the USA economy".

"It has now been virtually defined as a currency war by the U.S. president, given that he explicitly suggested foreign countries are manipulating exchange rates for competitive purposes", Jalinoos said. Experts say the newly-imposed tariffs against American agriculture products only add to the stresses on producers, who were already facing financial woes and worker shortages.

"We are being taken advantage of, and I don't like it", Trump said.

"There's no negotiating going on that I can see", Dollar said.

Mr Trump has voiced his opinions on trade with China since before his election, and on the campaign trail promised to label Beijing a currency manipulator within the first 100 days of his presidency - a pledge he has not yet fulfilled.